A good chunk of people have no savings account at all. That’s dangerous territory when the next expensive car or home repair or unexpected medical bill could be right around the corner. Financial advisor Brad Allen talks to Milwaukee’s WTMJ-4 about ways you can trick yourself into saving.
- Put your finances on autopilot – Automatic transfers are easy to set up, and every month they take a set amount of money from your checking or other spending accounts and put it into savings. Make your retirement contributions automatic with each paycheck.
- Check your habits – Take a look at the money you have coming in and the money going out. Can you negotiate a lower rate on your car insurance? Or save money by bringing your lunch to work instead of going out to eat?
- Make it a challenge – Make saving a competition. Any time you get friends involved, it is someone to hold you accountable and it creates some extra motivation to save. Challenge yourself to the 5 cent challenge. On the first day save a nickel, increase that savings by a nickel each day. Do this for one year. The most you’ll set aside is $18.25 on day 365. After a year you will have saved $3,358.05.
- Bank newfound income – Recently get a raise? Put all of your increased income into savings. If you recently paid off a car loan or credit card debt, keep making those payments, but pay yourself by transferring the money into savings instead sending it to the lender.
Click here for a budget worksheet to get you started.